Co-ownership

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Co-ownership

Concurrent holding

Takes place behind a trust of land.

Gray and Gray- 'the general movement from status dependent family relationships to non hierarchical relationships based on equality inevitably placed a new emphasis on share entitlements.' 

Types of co-ownership- Joint tenancy and tenancy in common.

Joint tenancy- all JT's are wholly entitled to the whole of the property. There are no shares.

Hammersmith LBC v Monk 1992- 'a transfer of land to two or more persons jointly operates so as to make them vis a vis the outside world, one single owner.' 

JT's can only exist alongside the four unities- unity of possession, interest, title and time.

Corin v Patton 1990- 'the hallmark of the institution of joint tenancy.'

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Co-ownership

  • Possession= indivisibility.
  • Interest= same in extent, nature and duration
  • Title= each JT must derive their title from same act or document
  • Time= interest of each JT must vest at the same time

Right of survivorship (ius accrescendi)- 'the grand and distinguishing incident of joint tenancy'- De Witt v San Francisco 1852. 

The winner (last one alive) takes all. 

Commorientes rule- 2 JT's- uncertain of time of death- the younger one survives the older. LPA 1925 s184- 'such deaths shall... be presumed to have occured in order of seniority and accordingly the younger shall be deemed to have survived the elder.' 

Introduction to severance- Harris v Goddard 1983- 'severance is the process of separating off the share of a joint tenant, so that the concurrent ownership will continue but the right of survivorship will no longer apply. The parties will hold in separate shares as tenants in common.'

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Co-ownership

Shares (notional, not physical). Joint tenant becomes tenant in common. There is no longer survivorship.

Tenancy in Common- Hold in shares. No right of survivorship for TC's. Only unity of possession is required for TC's. 

The nature of co-ownership at law- 

The historical problem of tenants in common- too many were inheriting shares of land so legal tenancies in common multiplied exponentially. 

LPA 1925 s1(6)- can only have a joint tenancy at law. 'A legal estate in land is not capable of subsisting or of being created in an undivided share in land.'

No severance. LPA 1925 s36(2)- 'no severance of a joint tenancy of the legal estate, so as to create a tenancy in common of land, shall be permissible, whether by operation of law or otherwise.' 

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Co-ownership

Trustee Act 1925 s34(2)- says there can be a maximum of 4 legal co-owners. In PQ look at the first 4 names, anyone after is in equity. 

The nature of co-ownership in equity- The issues-

  • Who are the beneficiaries?
  • Are the beneficiaries JT's or TC's? 
  • If TC's what is the size of eachs share? 

The rules are different for express trusts vs non express.

Express trusts- declare a trust (may say in problem question that they are JT's in law and equity).

Have the trust formalities been met? LPA 53 (1)(b)- must be in writing. Goodman v Gallant 1986. 

Non express trusts- the equitable preference for tenancy in common. Looking for justice and certainty.

But now equity follows the law (after LPA 1925) 

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Co-ownership

The general presumption: JT at law so JT at equity. 

So when does equity not follow the law? Remember there can never be a joint tenancy if you dont have the four unities. 

The general presumption can be rebutted by words of severance- they may be in a deed. They are valid if they are express or implied. Words such as 'equally' 'to be divided between two' 'among'. 

If you contribute purchase money in unequal proportions- tenants in common. 

If youre commercial partners- Malayan Credit v Jack Chia- MPH 1986.

Joint mortgagees- Stack v Dowden.

The effect of serverance- shares will be proportionate to the number of JT's. Not in contribution to purchase price. Severance is irreversible. It cannot be effected by will. 

If there are 5 JT's and severance by 1- 1TC of 20% and 4JT's of 80%. 

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Severance

For the remaining JT's survivorship still operates. 

Methods of severance- 1) severance by written notice (statutory)- important. In LPA 1925 s36(2)- shall give to the other joint tenants a notice in writing or do other acts or things as would have been effectual' 

2) Unilateral notice (no consent required from other JT's)- there is no predetermined form, but needs to be in writing in statute. 

Re Drapers Conveyance 1969- there was severance.

Harris v Goddard 1983-'I do not see why the commencement of legal proceedings by writ or originating summons or the swearing of an affidavit in those proceedings should not in appropriate circumstances constitute notice in writing within the meaning of 36(2).'

Burgess v Rawnsley 1975. 

Need to have written notice (doesnt need to be signed) and intention to sever (this must be immediate).

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Severance

Gore and Snell v Carpenter 1990.

Intention must be for the notice to effect immediate severance- Harris v Goddard.

Effective service of the written notice- needs to be served on all tenants. LPA 1925 s196(3)- can be sufficiently served if left at the last known place of abode or business of the person youre trying to sever from.

Do you need to read the notice? Kinch v Bullard 1998- dont need to read the notice. 'Provided that it can be established that, irrespective of the identity of the person who delivered the notice to a particular address, it was delivered to that address, then the notice has been validly served... provided that it is the addressee's last known abode or place of business.' 

Registered post comes under LPA 1925 s196(4)- which says that there is effective service when you post, not when it is delivered. 

Quigley v Masterson 2011. 

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Severance

Older rule- severance at common law- Williams v Hensman 1861- gave 3 methods- 1) act operating on a JT's share 2) mutual agreement 3) mutual conduct. 

1) severance by act of JT 'operating upon his own share'- unilateral way to sever- dont ask the others. Act isnt compatible with joint tenancy. An act of disposition- such as JT transfers his 'share' to a third party, or to another JT or to a mortgagee. 

Example- we have 2 JT's. One purports to sell his interest to another, the new tenant will be 50% TC and the old tenant 50% TC. Severance is proportional to the number of JT's. Only severing in equity. 

Example 2- A B and C are JT's of the legal and equitable estate. A transfers his interest to P a stranger. A B and C remain as trustees of land, holding the legal estate as JT's on trust for P (as a tenant in common owning a 1/3rd share in equity) and B and C (as JT's of the remaining 2/3rds). B and C are wholly entitled to their 2/3rds as JT's (have survivorship.) 

Example 3- A B and C are JT's of the legal and equitable estate. A transfers his interest to B. B acquires dual status in equity. B becomes a TC of 1/3 interest and a JT with C for the remaining 2/3rds. 

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Severance

If a JT commences proceedings against another JT- Harris v Goddard 1983 said this is sufficient for severance. 

Corin v Patton 1990- 'unilateral action cannot destroy the unity of time, of possession, or of interest unless the unity of title is also destroyed, and it can only destroy the unity of title if the title of the party acting unilaterally is transferred or otherwise dealt with or affected in a way which results in a change in the legal and equitable estates in the relevant property. A statement of intention, without more, does not affect the unity of title.' 

2) severance by mutual agreement of JT's- Burgess v Rawnsley 1975- 'the significance of an agreement is not that it binds the parties but that it serves as an indication of a common intention to sever.' 

3) severance by mutual conduct of JT's- how different is this to mutual agreement? 

Williams v Hensman 1861- 'it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been affected.' Need an indication that acted as a TC. 

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Severance

What conduct? Can be done when ignorant of the fact that they're JT's.

JT's have held long term assumptions inconsistent with JT's. Worked on assumption that they had shares and can do what they want. This is mutual conduct. Quigley v Masterton. 

Gore and Snell v Carpenter 1990- 'a course of dealing is where over the years the parties have dealt with their interests in the property on the footing that they are interests in common and are not as joint.' 

Inclusive negotiations as to the ownership- McDowell v Hirschfield Lipson and Rumney and Smith 1992- no severance.

Physical division of land by JT'sGreenfield v Greenfield 1976

3) forfeiture- severance in consequence of unlawful killing. 

Cleaver v Mutual Reserve Fund Life Association 1892- 'no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting to the person asserting them from the crime of that person.'


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Severance

Cardozo- 'the social interest served by refusing to permit the criminal to profit by his crime is greater than that served by the preservation and enforcement of legal rights of ownership.' 

A constructive trust based on unjust enrichment- taking the share off the person who killed, and still has own shares. 

Manslaughter? Gray v Barr 1971- 'guilty of deliberate, intentional and unlawful violence or threats of violence.' 

Dunbar v Plant 1997- refined the test. (was eventually granted relief). 'the important point is that the crime that had fatal consequences was committed with a guilty mind (deliberately and intentionally). The particular means used to commit the crime (whether violent or non violent) are not a necessary ingredient of the rule.'

Granting relief from forfeiture- Forfeiture Act 1982 s2(1)- court can grant relief. This means severance will not occur.

Re K (Deceased) 1985. 

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Severance

More than 2 JT's? The rules here are not clear yet. Rasmanis v Jurewitsch 1970 (NSW)- applied the rule of constructive trust. Have A B and C and A kills B- C as TC of 1/3 (this is A's part and held on trust for C) A and C as JT's of 2/3rd? 

This is questionable because if A lives long enough he still gets 2/3rd and so does profit from his crime. 

More appropriate if B as TC of 1/3rd (this would go to next of kin) and A and C as JT's of 2/3rd.

Dont worry too much if this is on the exam, as the markers know there is no right answer yet.

Reform?

Law Commission Paper 1985- said it is too complex and should be able to sever by will. 

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